One of China’s most ambitious AI startups, Megvii, which is known for its facial recognition brand Face++, announced that it has raised $750 million in a Series D funding round.
Founded by three graduates from the prestigious Tsinghua University in China, Megvii specializes in applying its computer vision solutions to a range of use cases such as public security and mobile payment. It competes with its fast-growing Chinese peers, like the world’s most valuable AI startup, SenseTime which is also funded by Alibaba — and Sequoia-backed Yitu.
The new capital injection lifts the company’s valuation to just north of $4 billion as it gears up for its IPO later this year, sources told Reuters.
China aims to overtake the United States in AI on various fronts. In China, AI startups accounted for 48 percent of all AI fundings in 2017, surpassing those in the U.S. for the first time, shows data collected by CB Insights.
A critical caveat to China’s flourishing AI landscape is, as The New York Times and other publications have pointed out, the government’s use of the technology. While facial recognition has helped the police trace missing children and capture suspects, there have been concerns around its use as a surveillance tool.
Megvii’s new funding round comes just days after a Human Rights Watch report listed it as a technology provider to the Integrated Joint Operations Platform, a police app allegedly used to collect detailed data from a largely Muslim minority group in China’s far west province of Xinjiang. Megvii denied any links to the IJOP database per a Bloomberg report.
Kai-Fu Lee, a world-renowned AI expert and investor who was Google’s former China head, warned that any country in the world has the capacity to abuse AI, adding that China also uses the technology to transform retail, education and urban traffic among other sectors.
Megvii has attracted many big-name investors in and outside China to date. Participants in its Series D include Bank of China Group Investment Limited, the central bank’s wholly owned subsidiary focused on investments, and ICBC Asset Management (Global), the offshore investment subsidiary of the Industrial and Commercial Bank of China.
Foreign backers in the round include a wholly owned subsidiary of the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, and Australian investment bank Macquarie Group.
China has been exporting its advanced AI technologies to countries around the world. Megvii, according to a report by the South China Morning Post, was in talks to bring its software to Thailand and Malaysia. Last year, Yitu opened its first overseas office in Singapore to deploy its intelligence solutions to partners in the Southeast Asia. In a similar fashion, SenseTime landed in Japan by opening an autonomous driving test park early this year.
